FMC Released NPRM on OTI Licensing and Financial Responsibility Requirements

On October 10, the Federal Maritime Commission (FMC) released a notice of proposed rulemaking (NPRM) amending its rules governing the licensing, financial responsibility requirements, and duties of Ocean Transportation Intermediaries. The proposed rule is intended to adapt to changing industry conditions, improve regulatory effectiveness, improve transparency, streamline processes and reduce regulatory burdens.

On May 21, 2013 the Commission published an Advance Notice of Proposed Rulemaking (ANPR) proposing the first significant modifications to OTI licensing requirements in fourteen years. The Commission received over eighty comments from the public within the extended comment closing date. Though OTIs submitted the largest number of comments, significant comments were also submitted by associations of OTIs, vessel operating common carriers (VOCCs), groups of VOCCs, individual financial responsibility providers and surety associations. After reviewing the comments and identifying provisions that had drawn strong views from a sizeable number of OTIs and others, the Commission determined to make the following changes in the modifications proposed in the ANPR:

  • Drop all proposed financial responsibility increases. ANPR section 515.21. The current required levels will remain unchanged.
  • Eliminate new potential qualifications specified for OTIs and their Qualifying Individuals (QIs). ANPR sections 515.2(p), 515.11(a)(1)-(2), (b), (c), (e). Also dropped the proposed shortened deadline for replacing a QI after the QI's death, retirement or resignation. ANPR section 515.20(c). The current 30-day requirement to replace a QI is retained.
  • Remove the proposed additional bases specified for revocation or suspension of licenses (ANPR section 515.16) and termination or suspensions of registrations of foreign-based NVOCCs (ANPR section 515.19(g)).
  • Delete the proposed tiered claim and claim processing system that would give shippers priority to the proceeds of an OTI's financial responsibility. ANPR section 515.23(c)-(d). The current rules covering claims and claim processing remain unchanged. The requirement in ANPR section 515.21(a)(4), that OTIs restore their financial responsibility to the full required amount within 60 days of a claim being paid against it, is also dropped.
  • Eliminate draft requirements on common carriers and marine terminal operators to notify the Commission of their court or other transportation claims against OTIs, as well as the requirement that such notifications would be published on the Commission's Web site. ANPR section 515.23(e)-(f).
  • Delete the proposed added documentation requirements for OTIs and agents (ANPR section 515.31(a) and (c)), including a requirement for agency agreements to be in writing (ANPR section 515.31(k)).
  • Remove a new requirement on OTIs and agents not to include false or misleading information in advertisements. ANPR section 515.31(j)(2).
  • Remove proposed provision establishing a rebuttable presumption that an entity has performed the services it advertised. ANPR section 515.31(j)(3).
  • Delete the term “Advertisement” in ANPR section 515.2(a), as a consequence of the elimination of ANPR section 515.31(j).
  • Drop fees for renewals of OTI licenses and registrations.
  • Drop the proposal for a Certificate of Good Standing to be submitted for renewals.
The TIA International Committee will develop policy positions and prepare written comments for the NPRM. If you wish to participate, please contact Will Sehestedt (, 703.299.5713). If you would like to submit your own comments, the comment period ends on December 12, 2014. To view the entire NPRM, please click HERE.